Central Bank moves to allay fears over tracker mortgages
Code of conduct intended to help avoid home repossessions, bank's consumer chief insists
The Central Bank’s director of consumer protection, Bernard Sheridan (at front), has expressed concern that restrictions limiting to three per month the number of unsolicited contacts a bank can make with a borrower in arrears were hampering the speed at which many problem loans were being resolved. Photograph: Gareth Chaney/Collins
The Central Bank has insisted proposals in a new code of conduct which could permit banks to remove tracker mortgages from borrowers in serious arrears are intended to help people avoid repossession.
This morning, the bank's director of consumer protection Bernard Sheridan said protections within the current code were “working well”. However, he expressed concern that restrictions limiting the number of unsolicited contacts a bank can make with a borrower in arrears to three each month were hampering the speed at which many problem loans were being resolved.
“That contact needs to be made to find out what is the cause of the arrears and what can be done to resolve the arrears,” Mr Sheridan told RTE Radio.
He denied that allowing banks to contact distressed borrowers more frequently would lead to harassment, and said a number of inspections of bank practices by the Central Bank had not “found behaviour which would constitute harassment”.
He said proposals which would allow banks to move some borrowers off trackers would only apply to people who were in serious danger of having their homes repossessed.
He said there was “no doubt” tracker mortgages had value to borrowers in arrears, but suggested it could be possible to “convert the value of the trackers into writing down debt”, thus transferring unsustainable mortgages into more affordable ones.
When asked how consumers could know what deals banks were doing when many lenders insisted on non-disclosure agreements, he said the Central Bank was investigating whether it could “bring greater transparency to what is being offered”.